First Business Bank Reports Strong First Quarter 2022 Net Income of $8.7 Million

About this update from First Business Financial Services, Inc.

[{"type":"text","content":" \n-- Results include robust in-market deposit growth, strong asset quality metrics, and provision benefit --\n \n MADISON, Wis. --(BUSINESS WIRE)--\n First Business Financial Services, Inc. (the “Company”, the “Bank”, or “ First Business Bank”) (Nasdaq:FBIZ) reported net income of $8.7 million , or $1.02 diluted earnings per share, in the first quarter of 2022. This compares to net income of $8.6 million , or $1.01 per share, in the fourth quarter of 2021 and $9.7 million , or $1.12 per share, in the first quarter of 2021.\n \n“First Business Bank begins 2022 from a position of strength, with solid operating results, continued organic loan and deposit growth, and exceptional asset quality that again led to a loan loss provision benefit in the first quarter,” President and Chief Executive Officer Corey Chambas said. “Our record loan growth in late-2021 and continued loan production in early-2022 positioned us well, creating a larger earning-asset base that supported strong net interest income in the first quarter, despite elevated payoffs during the period. We remain confident in our ability to grow loans at a low double digit annual rate in 2022, given the strength of our team and the size of our pipelines heading into the second quarter. Together with our diversified fee income streams, the Bank generated solid top line revenue growth in the first quarter. Following the private placement of $32.5 million in new capital last month, we are well positioned for continued success in 2022 and beyond.”\n \n Quarterly Highlights \n \n \n Continued Organic Loan Production. Loans, excluding Paycheck Protection Program (“PPP”) loans, grew $20.9 million , or 3.8% annualized, from the fourth quarter of 2021 and $265.5 million , or 13.5%, from the first quarter of 2021, as the Company continued to expand its traditional lending throughout its geographies. The first quarter of 2022 included elevated loan payoffs of nearly $90 million , compared to just over $30 million in the fourth quarter of 2021.\n \n \n \n Robust In-Market Deposit Growth. Total period-end in-market deposits grew by $83.1 million , or 17.2% annualized, from the fourth quarter of 2021 and $274.1 million , or 15.8%, from the first quarter of 2021. Period-end in-market deposits represented 84.3% of total Bank funding at March 31, 2022 , compared to 82.9% at December 31, 2021 and 74.9% at March 31, 2021 .\n \n \n \n Diversified Fee Income. Non-interest income of $7.4 million for the first quarter made up 25.6% of top line revenue, reflecting the Company’s diversified fee income streams. Revenue of $2.8 million from private wealth management was the leading contributor to non-interest income, while the Company also benefited from $1.4 million in revenue from its investments in mezzanine funds.\n \n \n \n Strong Asset Quality Metrics. Non-performing assets declined 12.1% to $5.7 million , or 0.21% of total assets, improving from 0.25% and 0.73% of total assets on December 31, 2021 and March 31, 2021 , respectively. The Company had no active COVID-19 loan modifications as of March 31, 2022 . The Company recorded a provision benefit of $855,000 , compared to $508,000 in the fourth quarter of 2021 and $2.1 million in the first quarter of 2021.\n \n \n \n Capital Restructuring. The Company completed a private placement to institutional investors for $32.5 million in new capital consisting of a $20.0 million subordinated note and $12.5 million of preferred stock. A portion of the proceeds were used to redeem $10.3 million of higher cost trust preferred securities in the first quarter of 2022. Management plans to redeem an additional $9.1 million of subordinated notes in the second quarter of 2022. The remainder of the proceeds will be used for general corporate purposes, including to support the Bank’s growth strategy, and to fund the Company’s previously announced $5 million share repurchase plan.\n \n \n Quarterly Financial Results \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n21,426\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,863\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n \n \n \n \n7,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,195\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n28,812\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,493\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,058\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n18,887\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,644\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,449\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n \n \n \n \n9,925\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,849\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,609\n \n \n \n \n \n \n \n \n \nLess:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,068\n \n \n \n)\n \n \n \n \n \nNet loss on foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3\n \n \n \n \n \n \n \n \n \nAmortization of other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8\n \n \n \n \n \n \n \n \n \nSBA recourse benefit\n \n \n \n \n \n \n \n \n \n \n \n(76\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(122\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(130\n \n \n \n)\n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n \n \n \n \n10,844\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,470\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,796\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n \n \n \n \n2,172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,879\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,065\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n8,672\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,731\n \n \n \n \n \n \n \n \n \nEarnings per share, diluted\n \n \n \n \n \n \n \n$\n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.12\n \n \n \n \n \n \n \n \n \nBook value per share\n \n \n \n \n \n \n \n$\n \n \n \n27.46\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27.48\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24.83\n \n \n \n \n \n \n \n \n \nTangible book value per share (1)\n \n \n \n \n \n \n \n$\n \n \n \n26.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23.43\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \nAdjusted net interest margin (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n3.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.23\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.20\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n25.64\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n26.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n25.64\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n65.55\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n61.92\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n62.19\n \n \n \n%\n \n \n \n \n \nReturn on average assets (2)\n \n \n \n \n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.32\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.51\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n1.49\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.66\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.65\n \n \n \n%\n \n \n \n \n \nReturn on average equity (2)\n \n \n \n \n \n \n \n \n \n \n \n14.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n15.04\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n18.48\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,251,249\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,239,408\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,235,112\n \n \n \n \n \n \n \n \n \nSpecialized lending as a percent of total loans and leases\n \n \n \n \n \n \n \n \n \n \n \n19.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n19.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n15.65\n \n \n \n%\n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,244,642\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,179,769\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,182,958\n \n \n \n \n \n \n \n \n \nPeriod-end in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n2,011,373\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,285\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,737,226\n \n \n \n \n \n \n \n \n \nAverage in-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n1,932,576\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,866,875\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,722,107\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n23,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,336\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28,982\n \n \n \n \n \n \n \n \n \nNon-performing assets\n \n \n \n \n \n \n \n$\n \n \n \n5,734\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,522\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,023\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.09\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.29\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \n \n \n \n \nCalculation is annualized.\n \n \n \n \n \n \n \n \n \n Quarterly Financial Results - Excluding PPP Loans, Interest Income, and Fees \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n$\n \n \n \n21,125\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,898\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,048\n \n \n \n \n \n \n \n \n \nAdjusted non-interest income (1)\n \n \n \n \n \n \n \n \n \n \n \n7,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,195\n \n \n \n \n \n \n \n \n \nOperating revenue (1)\n \n \n \n \n \n \n \n \n \n \n \n28,511\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27,467\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25,243\n \n \n \n \n \n \n \n \n \nOperating expense (1)\n \n \n \n \n \n \n \n \n \n \n \n18,887\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,644\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,449\n \n \n \n \n \n \n \n \n \nPre-tax, pre-provision adjusted earnings (1)\n \n \n \n \n \n \n \n$\n \n \n \n9,624\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,823\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,794\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin (2)\n \n \n \n \n \n \n \n \n \n \n \n3.37\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \nFee income ratio (non-interest income / total revenue)\n \n \n \n \n \n \n \n \n \n \n \n25.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n27.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n28.50\n \n \n \n%\n \n \n \n \n \nEfficiency ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n66.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n64.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n69.12\n \n \n \n%\n \n \n \n \n \nPre-tax, pre-provision adjusted return on average assets (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n1.46\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.34\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPeriod-end loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,233,043\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,212,111\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,967,545\n \n \n \n \n \n \n \n \n \nSpecialized lending as a percent of total loans and leases\n \n \n \n \n \n \n \n \n \n \n \n19.38\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n20.02\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17.83\n \n \n \n%\n \n \n \n \n \nAverage loans and leases receivable\n \n \n \n \n \n \n \n$\n \n \n \n2,223,707\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,126,846\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,940,716\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.10\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.47\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \nThis is a non-GAAP financial measure. Management believes these measures are meaningful because they reflect adjustments commonly made by management, investors, regulators, and analysts to evaluate financial performance, provide greater understanding of ongoing operations, and enhance comparability of results with prior periods. See the section titled Non-GAAP Reconciliations at the end of this release for a reconciliation of GAAP financial measures to non-GAAP financial measures.\n \n \n \n \n \n(2)\n \n \n \n \n \n \n \nCalculation is annualized.\n \n \n \n \n \n \n \n \n \n First Quarter 2022 Compared to Fourth Quarter 2021 \n \nNet interest income increased $502,000 , or 2.4%, to $21.4 million .\n \n \nNet interest income growth was driven by an increase in average loans and leases, partially offset by a reduction in fees in lieu of interest and the accelerated amortization of $236,000 in debt issuance costs related to the redemption of trust preferred securities. Average loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $96.9 million , or 18.2% annualized, to $2.224 billion . Fees in lieu of interest, which can vary from quarter to quarter based on client-driven activity, totaled $1.3 million , compared to $1.7 million , and included $249,000 and $892,000 in PPP fees, respectively. Excluding fees in lieu of interest, interest income from PPP loans, and the aforementioned accelerated debt issuance costs, net interest income increased $1.2 million , or 25.7% annualized.\n \n \n \nThe yield on average interest-earning assets increased three basis points to 3.84% from 3.81%. Excluding average net PPP loans, PPP loan interest income, and the aforementioned fees in lieu of interest, the yield earned on average interest-earning assets increased seven basis points to 3.66% from 3.59%. The rate paid for average total bank funding decreased two basis point to 0.31% from 0.33%. Total bank funding is defined as total deposits plus Federal Home Loan Bank (“FHLB”) advances.\n \n \n \nNet interest margin was 3.39% in both periods of comparison. Adjusted net interest margin was 3.24%, up one basis point compared to 3.23% in the linked quarter. The aforementioned accelerated debt issuance costs reduced first quarter 2022 net interest margin and adjusted net interest margin by four basis points. Adjusted net interest margin is a non-GAAP measure representing net interest income excluding fees in lieu of interest and other recurring but volatile components of net interest margin divided by average interest-earning assets less average net PPP loans and other recurring but volatile components of average interest-earning assets such as excess liquidity and non-accrual loans.\n \n \n \nThe Bank continues to maintain an asset-sensitive balance sheet and ended the quarter appropriately positioned for net interest income to benefit from rising short-term interest rates.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $855,000 , compared to a $508,000 benefit in the fourth quarter of 2021.\n \n \nThe provision benefit in the first quarter of 2022 was primarily due to a $416,000 reduction due to qualitative risk factor improvements, a net decrease in specific reserves of $280,000 , a $206,000 reduction in the general reserve from improving historical loss rates, and net recoveries of $188,000 . These decreases were partially offset by a $235,000 increase in the general reserve due to loan growth.\n \n \nNon-interest income decreased $183,000 , or 2.4%, to $7.4 million .\n \n \nPrivate wealth management fee income decreased $33,000 , or 1.1% to $2.8 million . Private wealth and trust assets under management and administration measured $2.834 billion at March 31, 2022 , down $86.7 million , primarily due to a decrease in market valuations, which was partially offset by new business development.\n \n \n \nGains on sale of SBA loans decreased $457,000 to $585,000 . Management believes SBA 7a loan production, while variable based on timing of closings, will increase on an annual basis at a measured pace.\n \n \n \nCommercial loan interest rate swap fee income decreased $459,000 to $225,000 . Swap fee income can vary from period to period based on client demand and the interest rate environment.\n \n \n \nOther fee income increased $817,000 to $2.1 million , compared to $1.3 million in the fourth quarter. The increase is primarily due to strong returns on the Company’s investments in mezzanine funds.\n \n \nNon-interest expense increased $1.3 million , or 7.4%, to $18.8 million , while operating expense increased $1.2 million , or 7.0%, to $18.9 million .\n \n \nCompensation expense was $13.6 million , reflecting an increase of $1.2 million , or 9.6%, from the linked quarter primarily due to above average annual merit increases, reflecting the competitive job market, as well as payroll taxes paid in the quarter on a record annual cash bonus plan payout, and an expanded workforce. Management believes the increase in compensation expense will decline from this seasonally high rate and stabilize to a modestly lower rate during the remainder of the year. Average full-time equivalent employees (“FTE”) for the first quarter of 2022 were 310, up nine from 301 in the linked quarter.\n \n \n \nProfessional fees were $1.2 million , increasing $237,000 , or 25.4%, from the linked quarter primarily due to legal fees associated with tax credit investments, moderate increases in audit fees, and other professional and consulting services.\n \n \n \n FDIC insurance expense was $313,000 , increasing $103,000 , or 49.0%, from the linked quarter primarily due to an increase in both the assessment rate and the assessable base.\n \n \n \nOther non-interest expense decreased $269,000 to $513,000 . During the linked quarter the Company recorded a $106,000 increase in the credit valuation adjustment (“CVA”) related to its commercial loan interest rate swap program, while no adjustment was recorded in the current period. The CVA can vary from period to period based on the size of the portfolio, credit metrics, and the interest rate environment in any given quarter. The remaining variance was mainly due to a seasonal increase in charitable donations in the linked quarter, as well as a current quarter increase in reimbursements received for loan expenses.\n \n \nIncome tax expense decreased $707,000 . or 24.6%, to $2.2 million . The effective tax rate, excluding discrete items, was 23.5%, compared to 24.0% for the full year 2021. For 2022, the Corporation expects to report an effective tax rate of 23%-24%, excluding discrete items, as management intends to continue actively pursuing tax credit opportunities.\n \nTotal period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $20.9 million , or 3.8% annualized, to $2.233 billion . The first quarter of 2022 included elevated loan payoffs of nearly $90 million , compared to just over $30 million in the fourth quarter of 2021. These elevated levels of payoffs primarily stem from the sales of businesses and real estate properties, which can be variable depending on market conditions.\n \n \nCommercial real estate (“CRE”) loans increased by $15.1 million , or 4.1% annualized, to $1.470 billion , compared to $1.455 billion , as increases in construction financing and owner-occupied real estate offset payoffs and paydowns in multi-family and non-owner occupied loans.\n \n \n \nCommercial and industrial (“C&I”) loans decreased $10.1 million , primarily due to the aforementioned payoffs and PPP loan forgiveness. C&I loans, excluding net PPP loans, decreased $1.0 million .\n \n \nTotal period-end in-market deposits increased $83.1 million , or 17.2% annualized, to $2.011 billion , compared to $1.928 billion , and the average rate paid was 0.13% in both periods. The Bank’s deposit-centric sales strategy, led by treasury management sales, contributed to growth across all in-market deposit categories.\n \nPeriod-end wholesale funding, including FHLB advances, brokered deposits, and deposits gathered through internet deposit listing services, decreased $24.7 million to $373.7 million .\n \n \nWholesale deposits decreased $17.3 million to $12.3 million . The average rate paid on wholesale deposits increased 188 basis points to 2.91% and the weighted average original maturity of brokered certificates of deposit increased to 4.8 years from 3.8 years.\n \n \n \nFHLB advances decreased $7.4 million to $361.4 million . The average rate paid on FHLB advances decreased 22 basis point to 1.08% and the weighted average original maturity increased to 6.0 years from 5.9 years.\n \n \nNon-performing assets decreased $788,000 , or 12.1%, to $5.7 million , or 0.21% of total assets, compared to $6.5 million , or 0.25% of total assets. The reduction in non-performing assets was primarily due to loan payoffs and paydowns.\n \nThe allowance for loan and lease losses decreased $667,000 , or 2.7%, as an increase in the general reserve from loan growth was more than offset by a decrease in the historical loss rates, qualitative risk factors, and specific reserves.\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.05%, compared to 1.09% as of December 31, 2021 .\n \n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.06%, compared to 1.10% as of December 31, 2021 .\n \n \n First Quarter 2022 Compared to First Quarter 2021 \n \nNet interest income increased $563,000 , or 2.7%, to $21.4 million .\n \n \nThe increase in net interest income primarily reflects an increase in average gross loans and leases, partially offset by lower fees in lieu of interest and the accelerated amortization of $236,000 in debt issuance costs related to the redemption of trust preferred securities. Fees in lieu of interest decreased from $3.1 million to $1.3 million , primarily due to a $2.0 million reduction in PPP loan fee amortization. Excluding fees in lieu of interest, interest income from PPP loans, and the aforementioned accelerated debt issuance costs, net interest income increased $3.1 million , or 18.3%. Excluding net PPP loans, average gross loans and leases increased $283.0 million , or 14.6%.\n \n \n \nThe yield on average interest-earning assets measured 3.84% compared to 3.93%. Excluding fees in lieu of interest, PPP loan interest income, and net PPP loans, the yield on average interest-earning assets measured 3.66%, compared to 3.69%. This decrease in yield was primarily due to the renewal of fixed-rate loans and reinvestment of cash flows from the securities portfolio at historically low interest rates. The rate paid for average total bank funding decreased nine basis points to 0.31% from 0.40%.\n \n \n \nNet interest margin decreased five basis points to 3.39% from 3.44%. Adjusted net interest margin increased four basis points to 3.24% from 3.20%.\n \n \nThe Company reported a net benefit to provision for loan and lease losses of $855,000 , compared to provision benefit of $2.1 million in the first quarter of 2021. The reasons for the provision benefit are consistent with the explanations discussed above in the linked quarter comparison.\n \nNon-interest income of $7.4 million increased by $191,000 , or 2.7%, from $7.2 million in the prior year period.\n \n \nPrivate wealth management fee income increased $434,000 , or 18.0%, to $2.8 million . Private wealth and trust assets under management and administration measured $2.834 billion at March 31, 2022 , up $447.5 million , or 18.8%.\n \n \n \nGains on sale of SBA loans decreased $493,000 to $585,000 . Management believes SBA 7a loan production, while variable based on timing of closings, will increase on an annual basis at a measured pace.\n \n \n \nLoan fees of $652,000 increased by $107,000 , or 19.6%, primarily due to an increase in conventional, SBA, and floorplan financing activity generating additional processing and service fee income.\n \n \n \nCommercial loan interest rate swap fee income was $225,000 , compared to $684,000 in the prior year period. Swap fee income varies from period to period based on client demand and the interest rate environment in any given quarter.\n \n \n \nOther fee income increased $520,000 , or 33.2%, to $2.1 million compared to $1.6 million , primarily due to higher returns from the Company’s investments in mezzanine funds.\n \n \nNon-interest expense increased $1.5 million , or 8.6%, to $18.8 million . Operating expense increased $1.4 million , or 8.2%, to $18.9 million .\n \n \nCompensation expense increased $981,000 , or 7.8%, to $13.6 million . Average FTEs were 310 in the first quarter of 2022, compared to 305 in the first quarter of 2021. The reasons for the increase in compensation expense are consistent with the explanations discussed above in the linked quarter analysis.\n \n \n \nProfessional fees increased $304,000 , or 35.1%, to $1.2 million , primarily due to an increase in legal expenses related to historic tax credit investments, an increase in audit expenses, and a general increase in other professional consulting services for various projects.\n \n \n \nMarketing expense increased $109,000 , or 27.9%, to $500,000 mainly due to an increase in business development activities as the Company continues to return to pre-pandemic spending levels.\n \n \n \nOther non-interest expense increased $239,000 , or 87.2%, to $513,000 , partially due to an increase in travel expense. In addition, the first quarter of 2021 included a reduction in CVA related to the commercial loan interest rate swap program, while no adjustment was recorded in the current period.\n \n \nTotal period-end loans and leases receivable, excluding net PPP loans in both periods of comparison, increased $265.5 million , or 13.5%, to $2.233 billion .\n \n \nC&I loans, excluding net PPP loans, increased $185.8 million , or 35.9%, due to an increase in both conventional commercial lending, as well as specialized commercial lending, which represents 19.4% of total gross loans, up from 17.8% last year. Management believes this growth rate will moderate to lower double-digits as the Company’s specialized lending products scale over time.\n \n \n \nCRE loans increased $77.2 million , or 5.5%, primarily due to an increase in non-owner-occupied real estate and construction financing.\n \n \nTotal period-end in-market deposits increased $274.1 million , or 15.8%, to $2.011 billion and the average rate paid decreased three basis points to 0.13%. This increase in deposits was principally due to an $82.1 million and $174.9 million increase in transaction and money market accounts, respectively.\n \nPeriod-end wholesale funding decreased $207.6 million to $373.7 million .\n \n \nWholesale deposits decreased $153.2 million to $12.3 million , compared to $165.5 million , as the existing portfolio runoff was replaced by in-market deposits. The average rate paid on brokered certificates of deposit increased 215 basis points to 2.91% and the weighted average original maturity increased to 4.8 years from 3.9 years.\n \n \n \nFHLB advances decreased $54.4 million to $361.4 million . The average rate paid on FHLB advances decreased 28 basis points to 1.08% and the weighted average original maturity increased to 6.0 years from 5.7 years.\n \n \nNon-performing assets decreased to $5.7 million , or 0.21% of total assets, compared to $19.0 million , or 0.73% of total assets. Excluding net PPP loans, non-performing assets decreased to 0.21% of total assets as of March 31, 2022 compared to 0.81% one year prior.\n \nThe allowance for loan and lease losses decreased $5.3 million to $23.7 million , compared to $29.0 million .\n \n \nThe allowance for loan and lease losses as a percent of total gross loans and leases was 1.05% compared to 1.29%.\n \n \n \nExcluding net PPP loans, the allowance for loan and leases losses as a percent of total gross loans and leases was 1.06% as of March 31, 2022 , compared to 1.47% one year prior.\n \n \n Paycheck Protection Program \n \nAs of March 31, 2022 , the Company had $18.5 million in gross PPP loans outstanding and deferred processing fees outstanding of $308,000 . The processing fees are deferred and recognized over the contractual life of the loan, or accelerated at forgiveness, as an adjustment of yield using the interest method. During the three months ended March 31, 2022 , the Company recognized $249,000 of PPP processing fees in interest income. The SBA provides a guaranty to the lender of 100% of principal and interest, unless the lender violated an obligation under the agreement. Since loan losses are expected to be immaterial, if at all, due to the government guarantee, management excluded the PPP loans from the allowance for loan and lease losses calculation. These short-term loans were funded primarily through a combination of excess cash held at the Federal Reserve and from an increase in in-market deposits.\n \n Share Repurchase Program Update \n \nAs previously announced, effective March 4, 2022 , the Company’s Board of Directors authorized the repurchase by the Company of shares of its common stock with a maximum aggregate purchase price of $5.0 million , effective March 4, 2022 through March 4, 2023 . During March, the Company repurchased a total of 4,502 shares for approximately $148,000 at an average cost of $32.87 per share.\n \nAbout First Business Financial Services, Inc. \n \n First Business Financial Services, Inc. , (Nasdaq: FBIZ) is the parent company of First Business Bank . First Business Bank specializes in Business Banking, including Commercial Banking and Specialized Lending, Private Wealth, and Bank Consulting services, and through its refined focus, delivers unmatched expertise, accessibility, and responsiveness. Specialized Lending solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC . For additional information, visit www.firstbusiness.bank .\n \nThis release may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect First Business Bank’s current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Those statements are based on general assumptions and are subject to various risks, uncertainties, and other factors that may cause actual results to differ materially from the views, beliefs, and projections expressed in such statements. Such statements are subject to risks and uncertainties, including among other things:\n \n \nAdverse changes in the economy or business conditions, either nationally or in our markets, including, without limitation, inflation, supply chain issues, labor shortages, and the adverse effects of the COVID-19 pandemic on the global, national, and local economy, which may effect the Corporation’s credit quality, revenue, and business operations.\n \n \nCompetitive pressures among depository and other financial institutions nationally and in the Company’s markets.\n \n \nIncreases in defaults by borrowers and other delinquencies.\n \n \nManagement’s ability to manage growth effectively, including the successful expansion of our client service, administrative infrastructure, and internal management systems.\n \n \nFluctuations in interest rates and market prices.\n \n \nChanges in legislative or regulatory requirements applicable to the Company and its subsidiaries.\n \n \nChanges in tax requirements, including tax rate changes, new tax laws, and revised tax law interpretations.\n \n \nFraud, including client and system failure or breaches of our network security, including the Company’s internet banking activities.\n \n \nFailure to comply with the applicable SBA regulations in order to maintain the eligibility of the guaranteed portion of SBA loans.\n \n \nFor further information about the factors that could affect the Company’s future results, please see the Company’s annual report on Form 10-K for the year ended December 31, 2021 and other filings with the Securities and Exchange Commission .\n \n SELECTED FINANCIAL CONDITION DATA \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n September 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n June 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \n Assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCash and cash equivalents\n \n \n \n \n \n \n \n$\n \n \n \n95,603\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n57,110\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n110,624\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n389,977\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n58,874\n \n \n \n \n \n \n \n \n \nSecurities available-for-sale, at fair value\n \n \n \n \n \n \n \n \n \n \n \n223,631\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n205,702\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n194,056\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n171,219\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n173,261\n \n \n \n \n \n \n \n \n \nSecurities held-to-maturity, at amortized cost\n \n \n \n \n \n \n \n \n \n \n \n17,267\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,746\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,196\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,382\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24,783\n \n \n \n \n \n \n \n \n \nLoans held for sale\n \n \n \n \n \n \n \n \n \n \n \n2,418\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,570\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,603\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,059\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,576\n \n \n \n \n \n \n \n \n \nLoans and leases receivable\n \n \n \n \n \n \n \n \n \n \n \n2,251,249\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,239,408\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,123,306\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,143,561\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,235,112\n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n(23,669\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,336\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(24,676\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(25,675\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(28,982\n \n \n \n)\n \n \n \n \n \nLoans and leases receivable, net\n \n \n \n \n \n \n \n \n \n \n \n2,227,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,215,072\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,098,630\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,117,886\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,206,130\n \n \n \n \n \n \n \n \n \nPremises and equipment, net\n \n \n \n \n \n \n \n \n \n \n \n1,621\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,694\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,700\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,747\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,923\n \n \n \n \n \n \n \n \n \nForeclosed properties\n \n \n \n \n \n \n \n \n \n \n \n117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n179\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n31\n \n \n \n \n \n \n \n \n \nRight-of-use assets\n \n \n \n \n \n \n \n \n \n \n \n6,118\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,910\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,263\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,472\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,486\n \n \n \n \n \n \n \n \n \nBank-owned life insurance\n \n \n \n \n \n \n \n \n \n \n \n53,974\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,600\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53,244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n52,887\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n52,537\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank stock, at cost\n \n \n \n \n \n \n \n \n \n \n \n12,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,336\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,351\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,451\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14,941\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n12,184\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,268\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,229\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,178\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,055\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n \n \n \n \n26,890\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,343\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,678\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n32,377\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,104\n \n \n \n \n \n \n \n \n \nAccrued interest receivable and other assets\n \n \n \n \n \n \n \n \n \n \n \n43,816\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,390\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n40,664\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,855\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n38,017\n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,620,718\n \n \n \n \n \n \n \n \n \n Liabilities and Stockholders’ Equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nIn-market deposits\n \n \n \n \n \n \n \n$\n \n \n \n2,011,373\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,928,285\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,829,644\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,016,215\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1,737,226\n \n \n \n \n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n12,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n74,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n144,492\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n165,492\n \n \n \n \n \n \n \n \n \nTotal deposits\n \n \n \n \n \n \n \n \n \n \n \n2,023,694\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,957,923\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,904,282\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,160,707\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,902,718\n \n \n \n \n \n \n \n \n \n Federal Home Loan Bank advances and other borrowings\n \n \n \n \n \n \n \n \n \n \n \n414,487\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n403,451\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n394,090\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n420,113\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n448,417\n \n \n \n \n \n \n \n \n \nJunior subordinated notes\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,076\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,072\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,069\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,065\n \n \n \n \n \n \n \n \n \nLease liabilities\n \n \n \n \n \n \n \n \n \n \n \n7,580\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,406\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n5,780\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,005\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,040\n \n \n \n \n \n \n \n \n \nDerivatives\n \n \n \n \n \n \n \n \n \n \n \n24,961\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,283\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n31,890\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n36,109\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29,565\n \n \n \n \n \n \n \n \n \nAccrued interest payable and other liabilities\n \n \n \n \n \n \n \n \n \n \n \n8,309\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15,344\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,016\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,214\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n9,422\n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,479,031\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,420,483\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,359,130\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,644,217\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,406,227\n \n \n \n \n \n \n \n \n \nTotal stockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n245,051\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n232,422\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n225,280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n221,452\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n214,491\n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,620,718\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n STATEMENTS OF INCOME \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n September 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n June 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nTotal interest income\n \n \n \n \n \n \n \n$\n \n \n \n24,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,576\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,014\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24,599\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n23,806\n \n \n \n \n \n \n \n \n \nTotal interest expense\n \n \n \n \n \n \n \n \n \n \n \n2,809\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,791\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,947\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,943\n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n21,426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n20,863\n \n \n \n \n \n \n \n \n \nProvision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,269\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(958\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,068\n \n \n \n)\n \n \n \n \n \nNet interest income after provision for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n22,281\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,432\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23,492\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,610\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n22,931\n \n \n \n \n \n \n \n \n \nPrivate wealth management service fees\n \n \n \n \n \n \n \n \n \n \n \n2,841\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,874\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,759\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,744\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,407\n \n \n \n \n \n \n \n \n \nGain on sale of SBA loans\n \n \n \n \n \n \n \n \n \n \n \n585\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n721\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,203\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,078\n \n \n \n \n \n \n \n \n \nService charges on deposits\n \n \n \n \n \n \n \n \n \n \n \n999\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,023\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n956\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n941\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n917\n \n \n \n \n \n \n \n \n \nLoan fees\n \n \n \n \n \n \n \n \n \n \n \n652\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n679\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n713\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n545\n \n \n \n \n \n \n \n \n \nNet gain on sale of securities\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nSwap fees\n \n \n \n \n \n \n \n \n \n \n \n225\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n684\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n684\n \n \n \n \n \n \n \n \n \nOther non-interest income\n \n \n \n \n \n \n \n \n \n \n \n2,084\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,267\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,866\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n835\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,564\n \n \n \n \n \n \n \n \n \nTotal non-interest income\n \n \n \n \n \n \n \n \n \n \n \n7,386\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,569\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,015\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,321\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,195\n \n \n \n \n \n \n \n \n \nCompensation\n \n \n \n \n \n \n \n \n \n \n \n13,638\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,447\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,351\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n13,255\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,657\n \n \n \n \n \n \n \n \n \nOccupancy\n \n \n \n \n \n \n \n \n \n \n \n555\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n551\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n544\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n533\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n552\n \n \n \n \n \n \n \n \n \nProfessional fees\n \n \n \n \n \n \n \n \n \n \n \n1,170\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n933\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,024\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n913\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n866\n \n \n \n \n \n \n \n \n \nData processing\n \n \n \n \n \n \n \n \n \n \n \n780\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n773\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n746\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n798\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n770\n \n \n \n \n \n \n \n \n \nMarketing\n \n \n \n \n \n \n \n \n \n \n \n500\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n548\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n572\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n511\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n391\n \n \n \n \n \n \n \n \n \nEquipment\n \n \n \n \n \n \n \n \n \n \n \n244\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n223\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n260\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n261\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n246\n \n \n \n \n \n \n \n \n \nComputer software\n \n \n \n \n \n \n \n \n \n \n \n1,082\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n999\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,129\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,115\n \n \n \n \n \n \n \n \n \n FDIC insurance\n \n \n \n \n \n \n \n \n \n \n \n313\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n210\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n291\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n362\n \n \n \n \n \n \n \n \n \nCollateral liquidation cost\n \n \n \n \n \n \n \n \n \n \n \n16\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n40\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n47\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n84\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n94\n \n \n \n \n \n \n \n \n \nNet loss (gain) on foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n12\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(1\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n3\n \n \n \n \n \n \n \n \n \nOther non-interest expense\n \n \n \n \n \n \n \n \n \n \n \n513\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n782\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n650\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n421\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n274\n \n \n \n \n \n \n \n \n \nTotal non-interest expense\n \n \n \n \n \n \n \n \n \n \n \n18,823\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,531\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,490\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,184\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n17,330\n \n \n \n \n \n \n \n \n \nIncome before income tax expense\n \n \n \n \n \n \n \n \n \n \n \n10,844\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,470\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,017\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,747\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n12,796\n \n \n \n \n \n \n \n \n \nIncome tax expense\n \n \n \n \n \n \n \n \n \n \n \n2,172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,879\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,819\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,512\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,065\n \n \n \n \n \n \n \n \n \nNet income\n \n \n \n \n \n \n \n$\n \n \n \n8,672\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,198\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n8,235\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n9,731\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPer common share:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBasic earnings\n \n \n \n \n \n \n \n$\n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.12\n \n \n \n \n \n \n \n \n \nDiluted earnings\n \n \n \n \n \n \n \n \n \n \n \n1.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.01\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.07\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.12\n \n \n \n \n \n \n \n \n \nDividends declared\n \n \n \n \n \n \n \n \n \n \n \n0.1975\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.18\n \n \n \n \n \n \n \n \n \nBook value\n \n \n \n \n \n \n \n \n \n \n \n27.46\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27.48\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.56\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25.70\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24.83\n \n \n \n \n \n \n \n \n \nTangible book value\n \n \n \n \n \n \n \n \n \n \n \n26.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25.11\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23.43\n \n \n \n \n \n \n \n \n \nWeighted-average common shares outstanding(1)\n \n \n \n \n \n \n \n \n \n \n \n8,232,142\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,228,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,429,149\n \n \n \n \n \n \n \n \n \nWeighted-average diluted common shares outstanding(1)\n \n \n \n \n \n \n \n \n \n \n \n8,232,142\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,228,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,340,042\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,385,069\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,429,149\n \n \n \n \n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \nExcluding participating securities.\n \n \n \n \n \n \n \n \n \n NET INTEREST INCOME ANALYSIS \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n March 31, 2022 \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n March 31, 2021 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/ \n \n \n Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/ \n \n \n Rate(4) \n \n \n \n \n \n \n \n Average \n \n \n Balance \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Average \n \n \n Yield/ \n \n \n Rate(4) \n \n \n \n \n \n Interest-earning assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate and other mortgage loans(1)\n \n \n \n \n \n \n \n$\n \n \n \n1,459,891\n \n \n \n \n \n \n \n$\n \n \n \n13,346\n \n \n \n \n \n \n \n3.66\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,417,498\n \n \n \n \n \n \n \n$\n \n \n \n13,225\n \n \n \n \n \n \n \n3.73\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n1,357,141\n \n \n \n \n \n \n \n$\n \n \n \n12,528\n \n \n \n \n \n \n \n3.69\n \n \n \n%\n \n \n \n \n \nCommercial and industrial loans(1)\n \n \n \n \n \n \n \n \n \n \n \n718,364\n \n \n \n \n \n \n \n \n \n \n \n9,101\n \n \n \n \n \n \n \n5.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n702,108\n \n \n \n \n \n \n \n \n \n \n \n8,711\n \n \n \n \n \n \n \n4.96\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n757,898\n \n \n \n \n \n \n \n \n \n \n \n9,625\n \n \n \n \n \n \n \n5.08\n \n \n \n%\n \n \n \n \n \nDirect financing leases(1)\n \n \n \n \n \n \n \n \n \n \n \n16,540\n \n \n \n \n \n \n \n \n \n \n \n189\n \n \n \n \n \n \n \n4.57\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n17,662\n \n \n \n \n \n \n \n \n \n \n \n200\n \n \n \n \n \n \n \n4.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n22,271\n \n \n \n \n \n \n \n \n \n \n \n244\n \n \n \n \n \n \n \n4.38\n \n \n \n%\n \n \n \n \n \nConsumer and other loans(1)\n \n \n \n \n \n \n \n \n \n \n \n49,847\n \n \n \n \n \n \n \n \n \n \n \n436\n \n \n \n \n \n \n \n3.50\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,501\n \n \n \n \n \n \n \n \n \n \n \n376\n \n \n \n \n \n \n \n3.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n45,648\n \n \n \n \n \n \n \n \n \n \n \n398\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \nTotal loans and leases receivable(1)\n \n \n \n \n \n \n \n \n \n \n \n2,244,642\n \n \n \n \n \n \n \n \n \n \n \n23,072\n \n \n \n \n \n \n \n4.11\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,179,769\n \n \n \n \n \n \n \n \n \n \n \n22,512\n \n \n \n \n \n \n \n4.13\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,182,958\n \n \n \n \n \n \n \n \n \n \n \n22,795\n \n \n \n \n \n \n \n4.18\n \n \n \n%\n \n \n \n \n \nMortgage-related securities(2)\n \n \n \n \n \n \n \n \n \n \n \n184,962\n \n \n \n \n \n \n \n \n \n \n \n760\n \n \n \n \n \n \n \n1.64\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n170,002\n \n \n \n \n \n \n \n \n \n \n \n677\n \n \n \n \n \n \n \n1.59\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n163,324\n \n \n \n \n \n \n \n \n \n \n \n666\n \n \n \n \n \n \n \n1.63\n \n \n \n%\n \n \n \n \n \nOther investment securities(3)\n \n \n \n \n \n \n \n \n \n \n \n50,555\n \n \n \n \n \n \n \n \n \n \n \n215\n \n \n \n \n \n \n \n1.70\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n49,927\n \n \n \n \n \n \n \n \n \n \n \n209\n \n \n \n \n \n \n \n1.67\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,177\n \n \n \n \n \n \n \n \n \n \n \n187\n \n \n \n \n \n \n \n1.77\n \n \n \n%\n \n \n \n \n \nFHLB stock\n \n \n \n \n \n \n \n \n \n \n \n14,002\n \n \n \n \n \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n4.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n12,345\n \n \n \n \n \n \n \n \n \n \n \n155\n \n \n \n \n \n \n \n5.02\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n12,465\n \n \n \n \n \n \n \n \n \n \n \n152\n \n \n \n \n \n \n \n4.88\n \n \n \n%\n \n \n \n \n \nShort-term investments\n \n \n \n \n \n \n \n \n \n \n \n31,111\n \n \n \n \n \n \n \n \n \n \n \n16\n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n60,018\n \n \n \n \n \n \n \n \n \n \n \n23\n \n \n \n \n \n \n \n0.15\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n24,575\n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n0.10\n \n \n \n%\n \n \n \n \n \nTotal interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n2,525,272\n \n \n \n \n \n \n \n \n \n \n \n24,235\n \n \n \n \n \n \n \n3.84\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,472,061\n \n \n \n \n \n \n \n \n \n \n \n23,576\n \n \n \n \n \n \n \n3.81\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n2,425,499\n \n \n \n \n \n \n \n \n \n \n \n23,806\n \n \n \n \n \n \n \n3.93\n \n \n \n%\n \n \n \n \n \nNon-interest-earning assets\n \n \n \n \n \n \n \n \n \n \n \n140,969\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n140,844\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n151,665\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,666,241\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,612,905\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,577,164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest-bearing liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTransaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n533,251\n \n \n \n \n \n \n \n \n \n \n \n255\n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n497,743\n \n \n \n \n \n \n \n \n \n \n \n239\n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \n \n \n$\n \n \n \n521,130\n \n \n \n \n \n \n \n \n \n \n \n250\n \n \n \n \n \n \n \n0.19\n \n \n \n%\n \n \n \n \n \nMoney market\n \n \n \n \n \n \n \n \n \n \n \n784,276\n \n \n \n \n \n \n \n \n \n \n \n338\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n749,247\n \n \n \n \n \n \n \n \n \n \n \n321\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n657,690\n \n \n \n \n \n \n \n \n \n \n \n274\n \n \n \n \n \n \n \n0.17\n \n \n \n%\n \n \n \n \n \nCertificates of deposit\n \n \n \n \n \n \n \n \n \n \n \n52,519\n \n \n \n \n \n \n \n \n \n \n \n55\n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n42,507\n \n \n \n \n \n \n \n \n \n \n \n36\n \n \n \n \n \n \n \n0.34\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n57,424\n \n \n \n \n \n \n \n \n \n \n \n177\n \n \n \n \n \n \n \n1.23\n \n \n \n%\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n16,236\n \n \n \n \n \n \n \n \n \n \n \n118\n \n \n \n \n \n \n \n2.91\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n62,342\n \n \n \n \n \n \n \n \n \n \n \n161\n \n \n \n \n \n \n \n1.03\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n166,752\n \n \n \n \n \n \n \n \n \n \n \n318\n \n \n \n \n \n \n \n0.76\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing deposits\n \n \n \n \n \n \n \n \n \n \n \n1,386,282\n \n \n \n \n \n \n \n \n \n \n \n766\n \n \n \n \n \n \n \n0.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,351,839\n \n \n \n \n \n \n \n \n \n \n \n757\n \n \n \n \n \n \n \n0.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,402,996\n \n \n \n \n \n \n \n \n \n \n \n1,019\n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \nFHLB advances\n \n \n \n \n \n \n \n \n \n \n \n385,080\n \n \n \n \n \n \n \n \n \n \n \n1,036\n \n \n \n \n \n \n \n1.08\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n353,637\n \n \n \n \n \n \n \n \n \n \n \n1,149\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n366,670\n \n \n \n \n \n \n \n \n \n \n \n1,249\n \n \n \n \n \n \n \n1.36\n \n \n \n%\n \n \n \n \n \nOther borrowings\n \n \n \n \n \n \n \n \n \n \n \n40,311\n \n \n \n \n \n \n \n \n \n \n \n503\n \n \n \n \n \n \n \n4.99\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n35,270\n \n \n \n \n \n \n \n \n \n \n \n466\n \n \n \n \n \n \n \n5.28\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n27,296\n \n \n \n \n \n \n \n \n \n \n \n401\n \n \n \n \n \n \n \n5.88\n \n \n \n%\n \n \n \n \n \nJunior subordinated notes(5)\n \n \n \n \n \n \n \n \n \n \n \n9,850\n \n \n \n \n \n \n \n \n \n \n \n504\n \n \n \n \n \n \n \n20.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,073\n \n \n \n \n \n \n \n \n \n \n \n280\n \n \n \n \n \n \n \n11.12\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n10,063\n \n \n \n \n \n \n \n \n \n \n \n274\n \n \n \n \n \n \n \n10.89\n \n \n \n%\n \n \n \n \n \nTotal interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,821,523\n \n \n \n \n \n \n \n \n \n \n \n2,809\n \n \n \n \n \n \n \n0.62\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,750,819\n \n \n \n \n \n \n \n \n \n \n \n2,652\n \n \n \n \n \n \n \n0.61\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1,807,025\n \n \n \n \n \n \n \n \n \n \n \n2,943\n \n \n \n \n \n \n \n0.65\n \n \n \n%\n \n \n \n \n \nNon-interest-bearing demand deposit accounts\n \n \n \n \n \n \n \n \n \n \n \n562,530\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n577,378\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n485,863\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOther non-interest-bearing liabilities\n \n \n \n \n \n \n \n \n \n \n \n42,537\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56,280\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n73,695\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,426,590\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,384,477\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,366,583\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nStockholders’ equity\n \n \n \n \n \n \n \n \n \n \n \n239,651\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n228,428\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n210,581\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal liabilities and stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n2,666,241\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,612,905\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,577,164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,924\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n20,863\n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \nNet interest-earning assets\n \n \n \n \n \n \n \n$\n \n \n \n703,749\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n721,242\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n618,474\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \n \n(1)\n \n \n \n \n \n \n \nThe average balances of loans and leases include non-accrual loans and leases and loans held for sale. Interest income related to non-accrual loans and leases is recognized when collected. Interest income includes net loan fees collected in lieu of interest.\n \n \n \n \n \n(2)\n \n \n \n \n \n \n \nIncludes amortized cost basis of assets available for sale and held to maturity.\n \n \n \n \n \n(3)\n \n \n \n \n \n \n \nYields on tax-exempt municipal obligations are not presented on a tax-equivalent basis in this table.\n \n \n \n \n \n(4)\n \n \n \n \n \n \n \nRepresents annualized yields/rates.\n \n \n \n \n \n(5)\n \n \n \n \n \n \n \nThe calculation for the three months ended March 31, 2022 includes $236,000 in accelerated amortization of debt issuance costs.\n \n \n \n \n \n \n \n \n \n PROVISION FOR LOAN AND LEASE LOSS COMPOSITION \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n September 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n June 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nChange in general reserve due to subjective factor changes\n \n \n \n \n \n \n \n$\n \n \n \n(416\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(805\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(51\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(652\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n1,082\n \n \n \n \n \n \n \n \n \nChange in general reserve due to historical loss factor changes\n \n \n \n \n \n \n \n \n \n \n \n(206\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(862\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(923\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,687\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(984\n \n \n \n)\n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n \n \n \n \n22\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n106\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n364\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,894\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n144\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n \n \n \n \n(210\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(274\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,634\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(545\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,673\n \n \n \n)\n \n \n \n \n \nChange in specific reserves on impaired loans, net\n \n \n \n \n \n \n \n \n \n \n \n(280\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(64\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(451\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,466\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(194\n \n \n \n)\n \n \n \n \n \nChange due to loan growth, net\n \n \n \n \n \n \n \n \n \n \n \n235\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,391\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n426\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n498\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n557\n \n \n \n \n \n \n \n \n \nTotal provision for loan and lease losses\n \n \n \n \n \n \n \n$\n \n \n \n(855\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(508\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(2,269\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(958\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(2,068\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n PERFORMANCE RATIOS \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n September 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n June 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nReturn on average assets (annualized)\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n1.32\n \n \n \n%\n \n \n \n \n \n \n \n1.41\n \n \n \n%\n \n \n \n \n \n \n \n1.26\n \n \n \n%\n \n \n \n \n \n \n \n1.51\n \n \n \n%\n \n \n \n \n \nReturn on average equity (annualized)\n \n \n \n \n \n \n \n14.47\n \n \n \n%\n \n \n \n \n \n \n \n15.04\n \n \n \n%\n \n \n \n \n \n \n \n16.39\n \n \n \n%\n \n \n \n \n \n \n \n15.09\n \n \n \n%\n \n \n \n \n \n \n \n18.48\n \n \n \n%\n \n \n \n \n \nEfficiency ratio\n \n \n \n \n \n \n \n65.55\n \n \n \n%\n \n \n \n \n \n \n \n61.92\n \n \n \n%\n \n \n \n \n \n \n \n65.68\n \n \n \n%\n \n \n \n \n \n \n \n64.17\n \n \n \n%\n \n \n \n \n \n \n \n62.19\n \n \n \n%\n \n \n \n \n \nInterest rate spread\n \n \n \n \n \n \n \n3.22\n \n \n \n%\n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \n \n \n3.31\n \n \n \n%\n \n \n \n \n \n \n \n3.27\n \n \n \n%\n \n \n \n \n \nNet interest margin\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n3.39\n \n \n \n%\n \n \n \n \n \n \n \n3.45\n \n \n \n%\n \n \n \n \n \n \n \n3.49\n \n \n \n%\n \n \n \n \n \n \n \n3.44\n \n \n \n%\n \n \n \n \n \nAverage interest-earning assets to average interest-bearing liabilities\n \n \n \n \n \n \n \n138.64\n \n \n \n%\n \n \n \n \n \n \n \n141.19\n \n \n \n%\n \n \n \n \n \n \n \n139.19\n \n \n \n%\n \n \n \n \n \n \n \n136.54\n \n \n \n%\n \n \n \n \n \n \n \n134.23\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ASSET QUALITY RATIOS \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n September 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n June 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nNon-accrual loans and leases\n \n \n \n \n \n \n \n$\n \n \n \n5,617\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,358\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,433\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,422\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n18,992\n \n \n \n \n \n \n \n \n \nForeclosed properties\n \n \n \n \n \n \n \n \n \n \n \n117\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n164\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n179\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n31\n \n \n \n \n \n \n \n \n \nTotal non-performing assets\n \n \n \n \n \n \n \n \n \n \n \n5,734\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,522\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,605\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n11,601\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n19,023\n \n \n \n \n \n \n \n \n \nPerforming troubled debt restructurings\n \n \n \n \n \n \n \n \n \n \n \n203\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n217\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n53\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n56\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n59\n \n \n \n \n \n \n \n \n \nTotal impaired assets\n \n \n \n \n \n \n \n$\n \n \n \n5,937\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n6,739\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n7,658\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n11,657\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n19,082\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNon-accrual loans and leases as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.28\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.35\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.85\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total gross loans and leases plus foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.85\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.40\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.73\n \n \n \n%\n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.09\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.16\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.29\n \n \n \n%\n \n \n \n \n \nAllowance for loan and lease losses as a percent of non-accrual loans and leases\n \n \n \n \n \n \n \n \n \n \n \n421.38\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n382.76\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n331.98\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n224.79\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n152.60\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ASSET QUALITY RATIOS - EXCLUDING NET PPP LOANS \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n March 31 , \n \n \n 2022 \n \n \n \n \n \n \n \n December 31 , \n \n \n 2021 \n \n \n \n \n \n \n \n September 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n June 30 , \n \n \n 2021 \n \n \n \n \n \n \n \n March 31 , \n \n \n 2021 \n \n \n \n \n \nNon-accrual loans and leases as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.36\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.56\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.96\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total gross loans and leases plus foreclosed properties\n \n \n \n \n \n \n \n \n \n \n \n0.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.29\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.37\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.57\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.96\n \n \n \n%\n \n \n \n \n \nNon-performing assets as a percent of total assets\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n0.81\n \n \n \n%\n \n \n \n \n \nAllowance for loan and lease losses as a percent of total gross loans and leases\n \n \n \n \n \n \n \n \n \n \n \n1.06\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.10\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.27\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.47\n \n \n \n%\n \n \n \n \n \nPPP loans outstanding, net\n \n \n \n \n \n \n \n$\n \n \n \n18,206\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,297\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n64,454\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n120,723\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n267,567\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n NET CHARGE-OFFS (RECOVERIES) \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n$\n \n \n \n22\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n106\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n364\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,894\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n144\n \n \n \n \n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n \n \n \n \n(210\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(274\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(1,634\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(545\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(2,673\n \n \n \n)\n \n \n \n \n \nNet (recoveries) charge-offs\n \n \n \n \n \n \n \n$\n \n \n \n(188\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(168\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n(1,270\n \n \n \n)\n \n \n \n \n \n \n \n$\n \n \n \n2,349\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n(2,529\n \n \n \n)\n \n \n \n \n \nNet (recoveries) charge-offs as a percent of average gross loans and leases (annualized)\n \n \n \n \n \n \n \n \n \n \n \n(0.03\n \n \n \n)%\n \n \n \n \n \n \n \n \n \n \n \n(0.03\n \n \n \n)%\n \n \n \n \n \n \n \n \n \n \n \n(0.24\n \n \n \n)%\n \n \n \n \n \n \n \n \n \n \n \n0.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n(0.46\n \n \n \n)%\n \n \n \n \n \nAnnualized (recoveries) charge-offs as a percent of average gross loans and leases, excluding average net PPP loans\n \n \n \n \n \n \n \n \n \n \n \n(0.03\n \n \n \n)%\n \n \n \n \n \n \n \n \n \n \n \n(0.03\n \n \n \n)%\n \n \n \n \n \n \n \n \n \n \n \n(0.25\n \n \n \n)%\n \n \n \n \n \n \n \n \n \n \n \n0.47\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n(0.52\n \n \n \n)%\n \n \n \n \n \nAverage PPP loans outstanding, net\n \n \n \n \n \n \n \n$\n \n \n \n20,935\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n52,923\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n87,517\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n229,165\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n242,242\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n CAPITAL RATIOS \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nTotal capital to risk-weighted assets\n \n \n \n \n \n \n \n11.87\n \n \n \n%\n \n \n \n \n \n \n \n10.82\n \n \n \n%\n \n \n \n \n \n \n \n11.14\n \n \n \n%\n \n \n \n \n \n \n \n11.22\n \n \n \n%\n \n \n \n \n \n \n \n11.52\n \n \n \n%\n \n \n \n \n \nTier I capital to risk-weighted assets\n \n \n \n \n \n \n \n9.27\n \n \n \n%\n \n \n \n \n \n \n \n8.94\n \n \n \n%\n \n \n \n \n \n \n \n9.14\n \n \n \n%\n \n \n \n \n \n \n \n9.14\n \n \n \n%\n \n \n \n \n \n \n \n9.24\n \n \n \n%\n \n \n \n \n \nCommon equity tier I capital to risk-weighted assets\n \n \n \n \n \n \n \n8.81\n \n \n \n%\n \n \n \n \n \n \n \n8.55\n \n \n \n%\n \n \n \n \n \n \n \n8.73\n \n \n \n%\n \n \n \n \n \n \n \n8.72\n \n \n \n%\n \n \n \n \n \n \n \n8.81\n \n \n \n%\n \n \n \n \n \nTier I capital to adjusted assets\n \n \n \n \n \n \n \n9.09\n \n \n \n%\n \n \n \n \n \n \n \n8.94\n \n \n \n%\n \n \n \n \n \n \n \n8.69\n \n \n \n%\n \n \n \n \n \n \n \n8.48\n \n \n \n%\n \n \n \n \n \n \n \n8.37\n \n \n \n%\n \n \n \n \n \nTangible common equity to tangible assets\n \n \n \n \n \n \n \n8.14\n \n \n \n%\n \n \n \n \n \n \n \n8.34\n \n \n \n%\n \n \n \n \n \n \n \n8.28\n \n \n \n%\n \n \n \n \n \n \n \n7.33\n \n \n \n%\n \n \n \n \n \n \n \n7.76\n \n \n \n%\n \n \n \n \n \nTangible common equity to tangible assets, excluding net PPP loans\n \n \n \n \n \n \n \n8.20\n \n \n \n%\n \n \n \n \n \n \n \n8.42\n \n \n \n%\n \n \n \n \n \n \n \n8.50\n \n \n \n%\n \n \n \n \n \n \n \n7.66\n \n \n \n%\n \n \n \n \n \n \n \n8.65\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n LOAN AND LEASE RECEIVABLE COMPOSITION \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nCommercial real estate:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial real estate - owner occupied\n \n \n \n \n \n \n \n$\n \n \n \n254,237\n \n \n \n \n \n \n \n$\n \n \n \n235,589\n \n \n \n \n \n \n \n$\n \n \n \n241,977\n \n \n \n \n \n \n \n$\n \n \n \n253,600\n \n \n \n \n \n \n \n$\n \n \n \n256,812\n \n \n \n \n \nCommercial real estate - non-owner occupied\n \n \n \n \n \n \n \n \n \n \n \n656,185\n \n \n \n \n \n \n \n \n \n \n \n661,423\n \n \n \n \n \n \n \n \n \n \n \n639,423\n \n \n \n \n \n \n \n \n \n \n \n614,289\n \n \n \n \n \n \n \n \n \n \n \n592,090\n \n \n \n \n \nLand development\n \n \n \n \n \n \n \n \n \n \n \n40,092\n \n \n \n \n \n \n \n \n \n \n \n42,792\n \n \n \n \n \n \n \n \n \n \n \n39,119\n \n \n \n \n \n \n \n \n \n \n \n45,056\n \n \n \n \n \n \n \n \n \n \n \n46,544\n \n \n \n \n \nConstruction\n \n \n \n \n \n \n \n \n \n \n \n200,472\n \n \n \n \n \n \n \n \n \n \n \n179,841\n \n \n \n \n \n \n \n \n \n \n \n139,933\n \n \n \n \n \n \n \n \n \n \n \n139,943\n \n \n \n \n \n \n \n \n \n \n \n151,345\n \n \n \n \n \nMulti-family\n \n \n \n \n \n \n \n \n \n \n \n302,494\n \n \n \n \n \n \n \n \n \n \n \n320,072\n \n \n \n \n \n \n \n \n \n \n \n313,787\n \n \n \n \n \n \n \n \n \n \n \n319,351\n \n \n \n \n \n \n \n \n \n \n \n322,384\n \n \n \n \n \n1-4 family\n \n \n \n \n \n \n \n \n \n \n \n16,198\n \n \n \n \n \n \n \n \n \n \n \n14,911\n \n \n \n \n \n \n \n \n \n \n \n13,487\n \n \n \n \n \n \n \n \n \n \n \n19,769\n \n \n \n \n \n \n \n \n \n \n \n23,319\n \n \n \n \n \nTotal commercial real estate\n \n \n \n \n \n \n \n \n \n \n \n1,469,678\n \n \n \n \n \n \n \n \n \n \n \n1,454,628\n \n \n \n \n \n \n \n \n \n \n \n1,387,726\n \n \n \n \n \n \n \n \n \n \n \n1,392,008\n \n \n \n \n \n \n \n \n \n \n \n1,392,494\n \n \n \n \n \nCommercial and industrial\n \n \n \n \n \n \n \n \n \n \n \n720,695\n \n \n \n \n \n \n \n \n \n \n \n730,819\n \n \n \n \n \n \n \n \n \n \n \n681,065\n \n \n \n \n \n \n \n \n \n \n \n695,442\n \n \n \n \n \n \n \n \n \n \n \n784,305\n \n \n \n \n \nDirect financing leases, net\n \n \n \n \n \n \n \n \n \n \n \n14,551\n \n \n \n \n \n \n \n \n \n \n \n15,743\n \n \n \n \n \n \n \n \n \n \n \n16,810\n \n \n \n \n \n \n \n \n \n \n \n18,142\n \n \n \n \n \n \n \n \n \n \n \n19,616\n \n \n \n \n \nConsumer and other:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nHome equity and second mortgages\n \n \n \n \n \n \n \n \n \n \n \n4,523\n \n \n \n \n \n \n \n \n \n \n \n4,223\n \n \n \n \n \n \n \n \n \n \n \n4,576\n \n \n \n \n \n \n \n \n \n \n \n5,740\n \n \n \n \n \n \n \n \n \n \n \n6,719\n \n \n \n \n \nOther\n \n \n \n \n \n \n \n \n \n \n \n43,066\n \n \n \n \n \n \n \n \n \n \n \n35,518\n \n \n \n \n \n \n \n \n \n \n \n35,645\n \n \n \n \n \n \n \n \n \n \n \n36,567\n \n \n \n \n \n \n \n \n \n \n \n38,266\n \n \n \n \n \nTotal consumer and other\n \n \n \n \n \n \n \n \n \n \n \n47,589\n \n \n \n \n \n \n \n \n \n \n \n39,741\n \n \n \n \n \n \n \n \n \n \n \n40,221\n \n \n \n \n \n \n \n \n \n \n \n42,307\n \n \n \n \n \n \n \n \n \n \n \n44,985\n \n \n \n \n \nTotal gross loans and leases receivable\n \n \n \n \n \n \n \n \n \n \n \n2,252,513\n \n \n \n \n \n \n \n \n \n \n \n2,240,931\n \n \n \n \n \n \n \n \n \n \n \n2,125,822\n \n \n \n \n \n \n \n \n \n \n \n2,147,899\n \n \n \n \n \n \n \n \n \n \n \n2,241,400\n \n \n \n \n \nLess:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nAllowance for loan and lease losses\n \n \n \n \n \n \n \n \n \n \n \n23,669\n \n \n \n \n \n \n \n \n \n \n \n24,336\n \n \n \n \n \n \n \n \n \n \n \n24,676\n \n \n \n \n \n \n \n \n \n \n \n25,675\n \n \n \n \n \n \n \n \n \n \n \n28,982\n \n \n \n \n \nDeferred loan fees\n \n \n \n \n \n \n \n \n \n \n \n1,264\n \n \n \n \n \n \n \n \n \n \n \n1,523\n \n \n \n \n \n \n \n \n \n \n \n2,516\n \n \n \n \n \n \n \n \n \n \n \n4,338\n \n \n \n \n \n \n \n \n \n \n \n6,288\n \n \n \n \n \nLoans and leases receivable, net\n \n \n \n \n \n \n \n$\n \n \n \n2,227,580\n \n \n \n \n \n \n \n$\n \n \n \n2,215,072\n \n \n \n \n \n \n \n$\n \n \n \n2,098,630\n \n \n \n \n \n \n \n$\n \n \n \n2,117,886\n \n \n \n \n \n \n \n$\n \n \n \n2,206,130\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n DEPOSIT COMPOSITION \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nNon-interest-bearing transaction accounts\n \n \n \n \n \n \n \n$\n \n \n \n600,987\n \n \n \n \n \n \n \n$\n \n \n \n589,559\n \n \n \n \n \n \n \n$\n \n \n \n526,047\n \n \n \n \n \n \n \n$\n \n \n \n774,253\n \n \n \n \n \n \n \n$\n \n \n \n496,877\n \n \n \n \n \nInterest-bearing transaction accounts\n \n \n \n \n \n \n \n \n \n \n \n539,492\n \n \n \n \n \n \n \n \n \n \n \n530,225\n \n \n \n \n \n \n \n \n \n \n \n517,248\n \n \n \n \n \n \n \n \n \n \n \n511,698\n \n \n \n \n \n \n \n \n \n \n \n561,466\n \n \n \n \n \nMoney market accounts\n \n \n \n \n \n \n \n \n \n \n \n806,917\n \n \n \n \n \n \n \n \n \n \n \n754,410\n \n \n \n \n \n \n \n \n \n \n \n728,751\n \n \n \n \n \n \n \n \n \n \n \n685,127\n \n \n \n \n \n \n \n \n \n \n \n632,065\n \n \n \n \n \nCertificates of deposit\n \n \n \n \n \n \n \n \n \n \n \n63,977\n \n \n \n \n \n \n \n \n \n \n \n54,091\n \n \n \n \n \n \n \n \n \n \n \n57,598\n \n \n \n \n \n \n \n \n \n \n \n45,137\n \n \n \n \n \n \n \n \n \n \n \n46,818\n \n \n \n \n \nWholesale deposits\n \n \n \n \n \n \n \n \n \n \n \n12,321\n \n \n \n \n \n \n \n \n \n \n \n29,638\n \n \n \n \n \n \n \n \n \n \n \n74,638\n \n \n \n \n \n \n \n \n \n \n \n144,492\n \n \n \n \n \n \n \n \n \n \n \n165,492\n \n \n \n \n \nTotal deposits\n \n \n \n \n \n \n \n$\n \n \n \n2,023,694\n \n \n \n \n \n \n \n$\n \n \n \n1,957,923\n \n \n \n \n \n \n \n$\n \n \n \n1,904,282\n \n \n \n \n \n \n \n$\n \n \n \n2,160,707\n \n \n \n \n \n \n \n$\n \n \n \n1,902,718\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n TRUST ASSETS COMPOSITION \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (in thousands) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nTrust assets under management\n \n \n \n \n \n \n \n$\n \n \n \n2,636,896\n \n \n \n \n \n \n \n$\n \n \n \n2,711,760\n \n \n \n \n \n \n \n$\n \n \n \n2,545,089\n \n \n \n \n \n \n \n$\n \n \n \n2,362,257\n \n \n \n \n \n \n \n$\n \n \n \n2,195,804\n \n \n \n \n \nTrust assets under administration\n \n \n \n \n \n \n \n \n \n \n \n197,160\n \n \n \n \n \n \n \n \n \n \n \n208,954\n \n \n \n \n \n \n \n \n \n \n \n202,657\n \n \n \n \n \n \n \n \n \n \n \n202,116\n \n \n \n \n \n \n \n \n \n \n \n190,721\n \n \n \n \n \nTotal trust assets\n \n \n \n \n \n \n \n$\n \n \n \n2,834,056\n \n \n \n \n \n \n \n$\n \n \n \n2,920,714\n \n \n \n \n \n \n \n$\n \n \n \n2,747,746\n \n \n \n \n \n \n \n$\n \n \n \n2,564,373\n \n \n \n \n \n \n \n$\n \n \n \n2,386,525\n \n \n \n \n NON-GAAP RECONCILIATIONS \n \nCertain financial information provided in this release is determined by methods other than in accordance with generally accepted accounting principles ( United States ) (“GAAP”). Although the Company’s management believes that these non-GAAP financial measures provide a greater understanding of its business, these measures are not necessarily comparable to similar measures that may be presented by other companies.\n \n TANGIBLE BOOK VALUE \n \n“Tangible book value per share” is a non-GAAP measure representing tangible common equity divided by total common shares outstanding. “Tangible common equity” itself is a non-GAAP measure representing common stockholders’ equity reduced by intangible assets, if any. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in period-to-period changes in book value per common share exclusive of changes in intangible assets. The information provided below reconciles tangible book value per share and tangible common equity to their most comparable GAAP measures.\n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (Dollars in thousands, except per share amounts) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nCommon stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n233,059\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n232,422\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n225,280\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n221,452\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n214,491\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n(12,184\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,268\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,229\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,178\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,055\n \n \n \n)\n \n \n \n \n \nTangible common equity\n \n \n \n \n \n \n \n$\n \n \n \n220,875\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n220,154\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n213,051\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n209,274\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n202,436\n \n \n \n \n \n \n \n \n \nCommon shares outstanding\n \n \n \n \n \n \n \n \n \n \n \n8,488,585\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,457,564\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,483,099\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,617,761\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,638,195\n \n \n \n \n \n \n \n \n \nBook value per share\n \n \n \n \n \n \n \n$\n \n \n \n27.46\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27.48\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26.56\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n25.70\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n24.83\n \n \n \n \n \n \n \n \n \nTangible book value per share\n \n \n \n \n \n \n \n \n \n \n \n26.02\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n25.11\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n24.28\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23.43\n \n \n \n \n \n \n \n \n TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS \n \n“Tangible common equity to tangible assets” is defined as the ratio of common stockholders’ equity reduced by intangible assets, if any, divided by total assets reduced by intangible assets, if any. The Company’s management believes that this measure is important to many investors in the marketplace who are interested in the relative changes from period to period in common equity and total assets, each exclusive of changes in intangible assets. The information below reconciles tangible common equity and tangible assets to their most comparable GAAP measures.\n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n As of \n \n \n \n \n \n (Dollars in thousands) \n \n \n \n \n \n \n \n March 31 ,\n 2022 \n \n \n \n \n \n \n \n December 31 ,\n 2021 \n \n \n \n \n \n \n \n September 30 ,\n 2021 \n \n \n \n \n \n \n \n June 30 ,\n 2021 \n \n \n \n \n \n \n \n March 31 ,\n 2021 \n \n \n \n \n \nCommon stockholders’ equity\n \n \n \n \n \n \n \n$\n \n \n \n233,059\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n232,422\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n225,280\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n221,452\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n214,491\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n(12,184\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,268\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,229\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,178\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,055\n \n \n \n)\n \n \n \n \n \nTangible common equity\n \n \n \n \n \n \n \n$\n \n \n \n220,875\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n220,154\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n213,051\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n209,274\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n202,436\n \n \n \n \n \n \n \n \n \nTotal assets\n \n \n \n \n \n \n \n$\n \n \n \n2,724,082\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,652,905\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,584,410\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,865,669\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,620,718\n \n \n \n \n \n \n \n \n \n Goodwill and other intangible assets\n \n \n \n \n \n \n \n \n \n \n \n(12,184\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,268\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,229\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,178\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(12,055\n \n \n \n)\n \n \n \n \n \nTangible assets\n \n \n \n \n \n \n \n$\n \n \n \n2,711,898\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,640,637\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,572,181\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,853,491\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,608,663\n \n \n \n \n \n \n \n \n \nTangible common equity to tangible assets\n \n \n \n \n \n \n \n \n \n \n \n8.14\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n8.34\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n8.28\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n7.33\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n7.76\n \n \n \n%\n \n \n \n \n \nPeriod-end net PPP loans\n \n \n \n \n \n \n \n \n \n \n \n18,206\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n27,297\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n64,454\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n120,722\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n267,567\n \n \n \n \n \n \n \n \n \nTangible assets, excluding net PPP loans\n \n \n \n \n \n \n \n$\n \n \n \n2,693,692\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,613,340\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,507,727\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,732,769\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,341,096\n \n \n \n \n \n \n \n \n \nTangible common equity to tangible assets, excluding net PPP loans\n \n \n \n \n \n \n \n \n \n \n \n8.20\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n8.42\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n8.50\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n7.66\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n8.65\n \n \n \n%\n \n \n \n \n EFFICIENCY RATIO & PRE-TAX, PRE-PROVISION ADJUSTED EARNINGS \n \n“Efficiency ratio” is a non-GAAP measure representing non-interest expense excluding the effects of the SBA recourse provision, impairment of tax credit investments, losses or gains on foreclosed properties, amortization of other intangible assets and other discrete items, if any, divided by operating revenue, w...

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